Information technology exports from Bangladesh crossed a major mark in the last fiscal year as local firms and freelancers earned more than half a billion US dollars for the first time from external sources.
Local IT companies saw their export earnings shoot up 95 per cent year-on-year to $592.06 million in 2021-2022, according to the Export Promotion Bureau (EPB).
“The export growth was backed by the business process outsourcing (BPO) sector,” said Wahid Sharif, president of the Bangladesh Association of Contact Center and Outsourcing (BACCO).
BPO includes customer service, back-office operations, image processing, graphic design, animation, data entry, accounting and legal process outsourcing, and data analytics.
Export of computer data processing and hosting service, which covers most BPO and IT-enabled services, swelled 106 per cent to $484.4 million.
Industry people say the growth has been phenomenal since the middle of last year as businesses around the world rebounded thanks to the improvement in the Covid-19 situation.
“The revival of economic activities worldwide has helped our firms and freelancers attract more orders,” said Sharif.
According to the EPB, IT consultancy services raked in $38 million in 2021-22, up from $29.67 million a year ago, while software exports rose to $60 million from $51 million in 2020-21.
Export earnings of Brain Station 23, one of the top software exporters in Bangladesh, grew 40 to 50 per cent in the last fiscal year.
“Orders are flowing in,” said Raisul Kabir, chief executive officer of Brain Station 23, which hired more than 200 people in the last one year to take its total employees to 670.
Apart from traditional software such as payment gateway software, web application and mobile application, the demand for data science-related work is growing tremendously, the entrepreneur said.
“Products and services that drive the 4th industrial revolution-centric agenda, including machine learning, are also in great demand.”
Export receipts for the installation, maintenance and repair of computers and peripheral equipment increased by around 65 per cent to $9.93 million in 2021-2022.
“It is definitely a good sign for our industry and it also indicates the capability of our industry,” said Rashad Kabir, managing director of Dream71 Bangladesh Ltd, an export-oriented software company.
“Due to higher inflation globally, many IT companies, especially from Europe, are going to cut costs and buy services from the countries in Asia.”
In September, consumer prices rose 8.2 per cent in the US and 10 per cent in the eurozone.
Despite the phenomenal growth, Bangladesh’s IT export has remained at a far lower level than those of its peers.
For example, India’s exports of software services were $156 billion in the last fiscal year, according to The Economic Times.
Even Pakistan’s earnings from IT exports, including those related to telecommunication, computer and information services, surged 29.26 per cent to $1.94 billion in the July to March period of FY22, reports the Dawn.
Syed Almas Kabir, a former president of the Bangladesh Association of Software and Information Services, however, said the actual export earnings from the IT sector were much higher than the official figures.
The estimated annual IT export now stands at $1.3 billion, he said. “This is because many firms and freelancers don’t bring in their full amount.”
Industry people also allege that many firms and freelancers fetch their export proceeds through unofficial channels due to the higher rate of the dollar against the taka in the informal market.
The taka has lost its value by at least 20 per cent against the American greenback in the last seven months amid US dollar shortages caused by higher import bills amid the Russia-Ukraine war.
Almas also blamed the scarcity of skilled workforce in the sector.
“We have more than six lakh freelancers, but their per-hour earnings rate is very low since they mostly do low-value tasks. But Vietnamese and Indian freelancers earn at least three times as much as Bangladeshi freelancers owing to their superior skills.”
“We will be able to do more high-value tasks if we can develop IT professionals.”
BACCO’s Sharif said the changes in curriculum and the collaboration between academia, the government and industry are a must to fill the skill gap.
“We have been seeing a scarcity of programmers, especially in the last two years. There is an increased demand for programmers due to the growing demand of software companies,” said Rashad.
“If we can’t produce enough skilled programmers, we might lose the export potential.”
In Bangladesh, there are about six lakh freelancers and more than 2.5 lakh people are employed in IT firms and the IT sections of businesses, financial organisations and government organisations.
Raisul said the growth will be slower this fiscal year compared to FY22.
“The coming months will be challenging and high growth will not continue,” he said, adding that export orders for software, however, will not reduce.
“The future is a bit uncertain as the global economy is not in good shape,” said Sharif.